OSI Pharmaceuticals’ board of directors rejects Astellas Pharma’s $3.5 billion takeover bid

OSI board rejects Astellas’ $3.5 billion offer

MELVILLE, N.Y. — OSI Pharmaceuticals rejected a $3.5-billion takeover bid from Astellas Pharma Inc., telling shareholders Monday the offer was too low.

Astellas has attempted to acquire OSI for more than a year and, after repeated rejections, the Japanese company filed suit to prevent the OSI’s board from interfering and made a hostile bid earlier this month.

On Monday, OSI Chairman Robert Ingram said the offer “does not fully reflect OSI’s fundamental, intrinsic value.”

The board voted unanimously to reject Astellas again. The offer expires March 31.

Astellas said in a statement responding to the rejection that it “continues to firmly believe” in its offer.

“Unfortunately, today’s action by OSI’s board continues to delay the opportunity for OSI’s stockholders to consider Astellas’ offer,” the statement said. “Astellas continues to have no alternative at this time but to proceed with its offer directly to OSI’s stockholders.”

Astellas said it plans to nominate directors for OSI’s upcoming shareholder meeting with the hope that, if elected, they will fairly consider the offer.

OSI specializes in oncology, diabetes and obesity drugs, and Astellas has said the two companies will do better developing oncology drugs together.

OSI received most of its revenue from the lung and pancreatic cancer drug Tarceva, which it sells in partnership with Genentech, which is now part of Roche. In the fourth-quarter, OSI received $100.8 million in Tarceva-related revenue.

Shares of OSI Pharmaceuticals Inc. rose 30 cents to $57.98 in Monday afternoon trading.